Clearwire: 2 Million Subs By End Of 2010
Tallies 46,000 Wholesale Customers From Comcast, Time Warner Cable, Sprint
By Todd Spangler -- Multichannel News, 2/26/2010 2:15:00 PM
Clearwire, the wireless broadband company whose backers include Comcast and Time Warner Cable, expects to triple WiMax subscribers this year to hit about 2 million.
The company had a total subscriber base of 688,000 as of Dec. 31, 2009. Of those, 46,000 were wholesale subscribers from Comcast, Time Warner Cable and Sprint, each of which owns an equity stake in Clearwire.
Clearwire is bullish on racking up more subs through Sprint and the cable partners in the year ahead. "We are seeing a great ramp in the wholesale business and we are very optimistic about the future," Clearwire chief financial officer Erik Prusch said on the company's earnings call Wednesday. He noted that most of the 46,000 wholesale adds came in the fourth quarter.
In the fourth quarter, Clearwire launched WiMax in 13 markets
including Chicago, Dallas and Philadelphia. In 2010, it expects to build
out its network to cover the top 100 U.S. markets, with a service
footprint of up to 120 million people, with new markets expected to
include New York, Boston, Washington, D.C., Houston, the San Francisco
Bay Area, Denver, Minneapolis and Kansas City.
The next market to launch will be Houston and is scheduled to go live in the coming weeks, Clearwire CEO Bill Morrow said, also on the call.
"We expect the bulk of our 2010 market launches to take place toward the end of this year," Morrow said. "While the network build activity is well underway across dozens of new markets, we are studying our experience in those already launched and working with existing and future wholesale partners to optimize our subsequent launches."
Clearwire ended 2009 with slightly under 5,000 towers in service; for 2010 the company expects to build out slightly under 20,000 towers to provide the coverage in those markets.
Through Clearwire, Comcast offers High-Speed 2Go in markets including Philadelphia, Atlanta and Portland, Ore. TWC has launched Road Runner Mobile in Charlotte, Greensboro and Raleigh, N.C.; Dallas; San Antonio; and Honolulu and Maui.
Bright House Networks also is an investor in Clearwire but hasn't commercially launched WiMax service yet.
Clearwire expects retail cost-per-gross add to remain around the 2009 average of $565 because of "a significant number of market launches." In addition, the company expects retail average-revenue-per-user to remain flat with 2009, during which ARPU was $39.65.
Clearwire currently expects to have full year 2010 net cash spend between $2.8 billion and $3.2 billion. Last year the Kirkland, Wash.-based company raised $4.3 billion in funding, including $1.6 billion from strategic investors Sprint, Comcast, TWC, Bright House, Eagle River and Intel.
Also on the call, Prusch said Clearwire had identified a "material weakness in controls," and as such wrote off approximately $30 million in equipment inventory and increased reserves for obsolescence and shrinkage by $11 million.
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